Blockbuster Dumps Late Fees? 


According to this article on CNN, Blockbuster will be dropping late fees on movie and game rentals. Except that is not what they're doing. See, after the due date for the item (from two days to one week) customers will have one additional week to return the item, or they'll just charge you for it (minus the rental fee - how generous!) If you don't want to buy it, you have 30 days to return it and pay a "restocking fee" (don't mention how much that will be) and they'll refund the purchase price.

So what we have is an extended rental time, with nice high late fees that come on all at once. It's a slightly better system, I guess, but it's a bit disingenuous to say they're dropping late fees. However, based on Blockbuster's testing across the country, they claim that this pleases the customers more and increases overall revenue.

Now personally, I won't go near a Blockbuster after those little jerks at my local store sent my account to collections for $1.57 that I somehow neglected to pay. Buck fifty-seven. I sent them a check five years ago and haven't been back since. My local Hollywood video seems a much nicer place to rent - and I've never had a problem with them. Though it appears that evil lurks on the horizon as Blockbuster is making a move on them. Time to head for Netflix.

Update, December 27, 2004: It appears that Business 2.0 likes Blockbuster's change - or at least, can't argue with the market response. They do, however, see through the scheme: they call it Blockbuster's No-Fee Fees and credit their marketing department for keeping the media on message about doing away with late fees. 

 

Posted: Tue - December 14, 2004 at 09:14 AM          

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